SkyCity Entertainment Group has disclosed that its board rejected two takeover approaches received in May, including one from a fund managed by Oaktree Capital Management, after concluding that the proposals did not adequately reflect the company’s underlying value and contained problematic conditions.
“The SkyCity Board carefully considered these indicative proposals, with input from management and advisers,” the company explained. “The Board unanimously determined that these proposals did not adequately reflect the underlying value of the company, and that the conditions were problematic. Accordingly, the parties were advised that SkyCity was not prepared to proceed on the terms proposed.”
The approaches valued the New Zealand casino operator at between NZ$772 million and NZ$827 million, equivalent to $460.7 million to $493 million. Oaktree’s confidential, unsolicited, conditional and non-binding indicative proposal offered NZ$0.70 ($0.42) in cash for each SkyCity share.
A separate proposal implied a price of NZ$0.75 ($0.45) per share in cash. While the second party was initially unnamed, The Australian Financial Review has since confirmed the bid was filed by Sam Arnaout’s Iris Capital, the owner of Casino Canberra and Alice Springs’ Lasseters Hotel Casino.
The disclosure comes as SkyCity undertakes a series of measures aimed at strengthening its financial position. Last month, the company extended and consolidated two tranches of existing bank facilities into a single facility ahead of maturities scheduled for July and September 2027.
It has also confirmed the sale of an office building and investment properties near SkyCity Auckland and entered into a non-binding heads of agreement for the sale of The Grand Hotel at the property.
SkyCity’s financial performance has also weakened. Last week, it reported EBITDA of NZ$120.5 million ($71.92 million) for the year ended June 30, 2026, down 44.2% from a year earlier. Net profit after tax fell 37.6% to NZ$18.2 million ($10.8 million), with results affected by weaker visitation, the introduction of mandatory carded play across its domestic casinos and higher costs associated with the opening of the New Zealand International Convention Centre.
Both takeover proposals were subject to a range of conditions, including at least eight weeks of due diligence and the arrangement of debt financing. They also required agreement on transaction structure, negotiation of binding documentation, unanimous support from the SkyCity board, shareholder approval, regulatory approvals and internal approvals from the acquirers, among other matters.
One or both prospective buyers also requested that SkyCity refrain from entering into any binding agreement to acquire or dispose of assets, including transactions under its asset monetization program. They also sought exclusivity and the retention of SkyCity’s existing debt facilities.
SkyCity nevertheless indicated that it was prepared to engage further, including by providing due diligence information, if either party submitted a revised proposal addressing the board’s concerns. No improved proposal has been received.
The announcement follows Australian media reports that a “cashed-up suitor” was considering a full acquisition of SkyCity. Those reports identified Oaktree, Blackstone, Bally’s and Apollo Capital Management, owner of The Venetian Las Vegas, as possible bidders.
Oaktree has previously pursued acquisitions in the Australian casino sector. It unsuccessfully sought to acquire the country’s two dominant casino enterprises, Crown Resorts and Star Entertainment Group.
Separately, SkyCity last week confirmed that it had begun a strategic review of its Australian resort, SkyCity Adelaide, a process that could result in the sale of the property.
Original article: https://www.yogonet.com/international/news/2026/08/25/126064-skycity-rejected-two-takeover-bids-in-may-saying-they-undervalued-company
